Marketing Concepts of Hotel Chains and Family Operated Hotels in India - Thesis Proposal Example

DIKSHIT JHANB ID: 5891159 27.03 WORD COUNT: 2567 Table of Contents 3 With the development of globalization all the kinds of businesses face new challenges. India is a country with rich traditions, and it is attractive for tourists. As Indians prefer to work with friends and relatives, there are many family businesses in this country including hotel and restaurant business. Globalization brought many challenges to family hotel business, thus the given paper will compare the main marketing concepts and the concepts used by the family hotel businesses.Introduction 4 Research Topic and Objectives 4 Literature Review 5 The hospitality sector of India 5 Growth story 6 Family business and tourism 7 Attributes of family governance and outcomes 8 Marketing concepts 9 Segmentation 10 Targeting 10 Positioning 11 Marketing mix 12 Research Methodology 13 Research purpose 13 Data collection – primary and secondary 13 Validity and reliability 14 Time frame 14 References 16 Appendices 18 Appendix 1 18 Appendix 2 19 Appendix: 3 20 Abstract With the development of globalization all the kinds of businesses face new challenges. India is a country with rich traditions, and it is attractive for tourists. As Indians prefer to work with friends and relatives, there are many family businesses in this country including hotel and restaurant business. Globalization brought many challenges to family hotel business, thus the given paper will compare the main marketing concepts and the concepts used by the family hotel businesses.Introduction India is a country having attractive historical sites as well as landscapes, due to which several tourists from foreign countries are attracted. This scenic beauty of India comprises of varied cultures, contemporary cities along with good beaches and monuments. Thus, the Indian tourism has quite to offer to the tourists from abroad. It is after the imitating of the globalization phase in India that several global hotel chains have started their business in various parts of India. Consequently, the classical approaches of the hotel industry dominated by the family owned ones are confronting prime challenges of feasibility. This work would be focusing on the depiction of the prime concepts, which have been used by these hotels and will prove that due to globalization, the rivalry is now increasing in the country, thus family owned hotels have to change their strategy in order to remain competitive. Research Topic and Objectives The prime objectives of this proposal is to get the solutions to certain queries and to make a comparison of the two sectors that are the family operated hotels and the chain hotels of MNCs, etc. It would be evaluated and making the comparison in regard to the key differences in their marketing approaches. This would be also stressing on the prime sectors of this Indian hotel industry. The comparison would be made on certain criteria that are: What are the prime frameworks and concepts that are being used by the family operated businesses and their presence in the Indian tourism industry? What is the present condition of the Indian hospitality sector, its future avenues, changing patterns and the marketing scope of the two sectors? What technique would be suitable to make a comparison? What will be the prime aspects of marketing and their application to the Indian tourism sector particularly under the Indian hotel sector? Literature Review The Hospitality sector in India and several nations are one of the big employers of any country. It is after the initiating of the globalization phase that the hotel industry has emerged to be one of the prime industries of any country. As per Taylor and Holloway, the hotels in the present times are the outcome of 5 main aspects that are the location of the hotels, the kind of amenities provided by them, their image, service quality and the prices charged by them (Holloway & Taylor, 2006). The hospitality sector of India It is after the initiating of the globalization that there are several global firms that have started their business in the Indian markets. At present the global companies are making heavy investments on account of the rise in business and good returns on the investments made in the Indian economy. Indian economy is one of such economies of the world which has been able to reverse the general model of starting backward from the services to the agriculture sector. Mostly the model is having a nation, which due to betterment of the economic position is having the improvement of the agriculture sector first and then the industrial sector, and subsequently the service sector as the economy grows further. Growth story According to Deloitte’s Mintel Database, collected by a study for the hotel benchmark has found that the Asian hotel industry is experiencing a good growth. It is especially during the initial years that the standard revenue earned from a room has risen in the Asian markets like in India. It has been mainly because of the rise of several low costs airlines industry in India due to which various other industries have raised their attractiveness like the destinations of leisure that has led to people to find wide variety and range of locations in India. As per Macefield, the identity of India to be a tourist destination was having certain doubts from the starting of the 21st century due to the consistent conflict with the neighboring countries like Pakistan on Kashmir issues, etc. (Macefield, 2013). It is due to this that several nations declared India to be an unsafe travel destination for their citizens. It is after this that the hotel sector was hard hit but now it has gradually experienced good improvement over the past several years as Indian economy has emerged to be one of the leading emerging economies of the world. It is also after the rise in the disposable income of the India people has led to the increase in the purchasing power of the people and thus, their expenditure on travel and tourism is experiencing an increase. The figure given below is showing the per capita GDP growth in India since 2006 to 2014. As per the official website “Maps of India” the Indian hotel industry has been experiencing a successful growth that can be ranked on the second position after China in the Asian Pacific region (Maps of India, 2015). As per WTTC (World Travel and Trade Council) report, India has emerged to be one of the leading destination of tourism as it has been able to reach the third rank among the list of countries who have been able to encourage their tourism industry at a fast pace of 8.8 rate of percent since 2004 to 2013. Family business and tourism It is important for the current research to have a better comprehending of the two kinds of businesses that exist in the Indian tourism industry. In this the family owned business has been one of the oldest that has been in India for a long time. As per Carlsen and Getz, it is tourism that is leading to the providing of several opportunities for the businesses, which are owned and operated by families as it is inducing the communications to be developed in between the guests and the hosts under the property or the home of a family (Getz & Carlsen, 2005). Such kind of interactions are regarded to be important for giving memorable experiences to the travelers and a satisfaction which is ultimately leading to the development and growth of a society or a location. There are several researchers who are able to comprehend the significances of such family owned and operated businesses due to which the number of researches being conducted on this subject is rising at a fast pace. As per Cowling and Westhead, there have been several researchers who have observed many of the organizations that have been the reason for the two third and above of the entire development of the economies of West. As per Barry, who is citied in, Carlsen and Getz, the common way to define a family business is that it is a company, which is being managed by the members of a single family (Getz & Carlsen, 2005). Gersick et. Al. has recommended the use of a 3- dimensional framework for the development of family business as it is providing an explanation regarding the manner in which the family business is evolving at various phases that are being categorized under three divisions or axis. These are the family axis, ownership axis and the business axis. It is the business, which has evolved through a startup and expansion to maturity (Olsen, Chung, & Graf, 2013). The likely ownership is developing from the founding member, which is subsequently passed to a sibling association along with cousin consortium. Attributes of family governance and outcomes As per Cooper and Buhalis, there are various nations of the world, sole proprietorships that own these businesses that are serving various niches of the tourism sector (Buhalis & Cooper, 2013). Cost cutting or Parsimony is one of the prime attributes of the businesses that are family owned. It is an attribute which is present on account of the family’s ability of investment or the sector of a family or the individual financial resources of a person that are being invested in their business. In case a single family is having an ownership of a company then the owners would be careful while taking risks prior to making their investments of money (Durand & Vargas, 2012). The “Personalism” attributes of the family owned businesses imply the concentration of the power of the company, which is there in the hands of one family or an individual. It is due to this that all the decisions taking capabilities are being guided by the individual beliefs and rules. Marketing concepts As per Kotler et al, “marketing a social and managerial process by which people and groups obtain what they need and want through creating and exchanging products and values with others” (Kotler, Bowen, & Makens, 1999). However, this is being debated by Lamb et al, who considers marketing to be a process of planning and implementing the conceptions, pricing, promotion and distribution of concept, product and services for making exchanges which are sufficing the corporate and individual objectives (Lamb, Hair, & McDaniel, 2012). In order to make a comparison between the marketing approaches of the chain hotels and the family owned and operated hotels it is important to comprehend the prime marketing concepts. In this section it would be providing an overview of the concepts and provide an explanation regarding the manner they would be utilized in relation to the tourism sector (Chua, J. Chrisman, & Sharma, 2012). Segmentation Market segmentation is a procedure of finding the segments of customers who are unique and are having similar kind of demand attributes. It is a procedure of categorizing the market into separate divisions of customers who need different good or marketing mix. As per Buttle and Bowie, it is a process that is engaged to segment a market (Bowie & Buttle, 2013). The figure given below is showing the five steps that are involved in the process of market segmentation that are identifying of the market, creating of the basis of segmentation, creating segmentation variables, development and analysis of the profiles of the market divisions and finally analyzing the competency of the organization to cater to the chosen segments of customers. Targeting After the company has segmented its market and identified the likely beneficial segments that it has to initiate with the process of targeting. There are two steps that are to be taken for the targeting of the selected segments that are evolving the measures to analyze the attractiveness of the segment of markets and choosing the target segment. As per Clarke and Middleton, there are primarily five attributes of targeting a segment under the hospitality sector (Middleton & Clark, 2012). These are: Firstly a segment should be capable of being identified in a distinct way Secondly it should be measurable in quantitative terms Thirdly, there should be projected financial goals of the company that are to be accomplished through it Fourthly, it needs to have attached nature of the manufacturing and consumption attributes of such services. Fifthly, it should be given margins for anticipated disputes and complaints. The targeted group needs to be evaluated in regard to their influence on the environment of the company. Positioning It is a strategy by which the hospitality firms are able to position themselves in a unique and favorable way for the targeted segments of customers in comparison to their rivals. It is helping the company to make sure that the target market is attracted by the kind of goods, services and the brand name for which the company is having its standing in the market (Brebbia & Pineda, 2004). The hospitality firms are required to have certain characteristics by which they are able to achieve unique position in the market that are its location, quality of products and services, its pricing, variety of amenities and other services such as security, safety and parking, etc. Marketing mix According to Kotler, Marketing mix is defined as “The set of controllable tactical marketing tools that the firm blends to produce the response it wants in the target market” (Kotler P. , 2003). These tools are generally being categorized into four variables that are termed as the four P’s. These four P’s are the Product, Price, Place and Promotion. The figure given below shows the traditional four P’s of marketing mix. Research Methodology In this the qualitative approach would be appropriate as it will require analyzing the data inwards rather than numbers and moreover, it would help analyze the subjects instead of engaging with them in a distant manner. It is due to this that the research would be able to have a personal focus on the subjects of the study and give an intensive evaluation of the gathered data. Research purpose The purpose of this research is to analyze and make the comparison study of the marketing concepts that have been used by the Indian family owned and operated hotels and the other chain of hotels in order to determine their disadvantages in the current marketing conditions. The research findings would be based on the data presented in the current literature and the interviews, which would be conducted on the subject matter. Data collection – primary and secondary For performing of the qualitative research interviews would be conducted and would help in getting the primary source of information. The interviews would be done using 10 designed e-mail interviews that would be done by five of the top executives of the chain hotels and five from the hotels that are family owned and operated. The research would also be using the secondary data which would be collected through the official websites of the hotels, journal articles, books, newspapers and magazines, etc. It is going to assist in creating of good base for taking good questions for interviews and to help in comprehending the prime concepts of the marketing approaches that are being used by the two sectors of the Indian tourism industry. It is on the basis of this that the comparison would be drawn from the gathered data. Validity and reliability In this the data collected would be through the trustworthy sources due to which the information would be collected not only from the secondary sources but to ensure that the correct information has been collected. It would be cross checked through the interviews with the top executives of the two sectors hotels in India. Time frame This dissertation would be entirely completed by the end week of June, 2015. All the research queries would be settled through the collecting of data and analyzing them within the set time framework. The cross sectional studies would be performed for getting the required information in few days, weeks, or months as it would assist in giving the result that can be regarded as “One shot studies”. The current research would be depending on the cross sectional results, which have to be completed by the end of June and for this all the required data will be collected by the end week of April, 2015. Conclusion Globalization in tourism can be defined as a process of sharp strengthening of tourist flow, and also the flow of the services, the capital, information and technologies, which do usually appear under national government regulation. Globalization has long-term character, and its driving force is, first of all, the revolution in the sphere of information and communication technologies, the liberalization of the markets and aggravation of the international competition. Globalization of economy complicates the possibility of India to maintain high growth rates of economy. This happens due to the fact that many Indian businesses can’t meet international standards. Hotels of India differ according to world star classification. Here it is possible to reserve a room in a five-star hotel as well as to rent a room in hotel with one or two stars. It should be noted that hotels of India in popular resorts conform to the international standards of stardom. But the hotels, which are located not in resort places may offer very low level of service. As a rule, in the hotels belonging to well-known world networks the uniform standards are kept and supported. Inexpensive private hotels of India cannot always provide guests with comfort. Thus, in order to maintain competitive advantage family owned hotels in India should change their marketing strategy. References Blythe, J. (2001). Essentials of Marketing. England: Pearson Education Ltd. Bowie, D., & Buttle, F. (2013). Hospitality Marketing: An introduction. Oxford: Elsevier. Brebbia, C. A., & Pineda, F. (2004). Sustainable Tourism. Boston: WIT Press. Buhalis, D., & Cooper, .. (2013). Competition or Cooperation? Small and Medium Sized Tourism Enterprises at the Destination., 234-356. Burns, R. (2000). Introduction to Research Methods. London: Sage Publications. Chua, J., J. Chrisman, & Sharma, P. (2012). Defining the Family Business by Behaviour. . Entrepreneurship Theory and Practice, 19–39. Durand, R., & Vargas, V. (2012). Ownership, organization, and private firms‟ efficient use of resources. Strategic Management Journal, 667–675. Getz, D., & Carlsen. (2005). Family Business in Tourism State of the Art. Annals of Tourism Research, 237–258. Holloway, J., & Taylor, N. (2006). The Business of Tourism. London: Prentice Hall Financial Times. Kotler, P. (2003). Marketing management . Singapore: Prentice Hall Inc. Kotler, P., Bowen, J., & Makens, J. (1999). Marketing for Hospitality & Tourism . Singapore: Pearson Education Inc. Lamb, C., Hair, J., & McDaniel, C. (2012). Marketing in Travel Toursism. Singapore: Thompson Asia Pvt. Ltd. Macefield, S. (2013). India braced to take tourism‟s centre stage. London: Prentice Hall. Malkani, A. (2007). A Home away from Home. Hotel Business Review. Maps of India. (2015, march 13). Retrieved from www.mapsofindia.com Middleton, V., & Clark, J. (2012). Marketing in Travel and Tourism. Oxford: Butterworth-Heinemann. Morck, R., Shleifer, A., & Vishny, R. (1988). Management ownership and market evaluation: An empirical investigation. Journal of Financial Economics, 842–852. Olsen, M. D., Chung, Y., & Graf, N. L. (2013). Branding: Myth and reality in the hotel industry. Journal of retail & leisure property., 146-162. Sanjeev, G. (2007). Measuring efficiency of the hotel and restaurant sector: the case of India. . International Journal of Contemporary Hospitality Management, 378-387. Saunders, M., Philip, L., & Adrian, T. (2003). Research Methods for Business Students. Essex: Pearson Education Limited. Appendices Appendix 1 Interview Performa for hotel chains. Permission: The researcher would like to ask for your permission to answer the following research questions. Kindly note that, this e-mail interview is for an educational purpose only, the researcher will not use this information for any personal motives or financial gains. The names of the interviewees will be kept confidential on their request. Q.1. For how many years have you been working in this industry? Q.2. How many hotels does the company own, in India and abroad? Q.3. These hotels target which segments of the society? Q.4. How are these hotels positioned in the market? Q.5. What Markets do these hotels target mainly? Q.6. Are there any specific Marketing strategies that these hotels follow? Q.7. Which are the most commonly used modes of marketing for these hotels? Q.8. What are the ‘Tariff Plans’ for these hotels? Q.9. Do you consider the Local Family operated hotels as a business threat? If yes, please elaborate Q.10. Is the researcher allowed to reveal your identity, to address you in his research? Appendix 2 Interview Performa for Family Operated Hotels. Permission: The researcher would like to ask for your permission to answer the following research questions. Kindly note that, this e-mail interview is for an educational purpose only, the researcher will not use this information for any personal motives or financial gains. The names of the interviewees will be kept confidential on their request. Q.1. How many years have you been working in this industry? Q.2. How many hotels does the company own, in India and abroad? Q.3. These hotels target which segments of the society? Q.4. How are these hotels positioned in the market? Q.5. What Markets do these hotels target mainly? Q.6. Are there any specific Marketing strategies that these hotels follow? Q.7. Which is the most commonly used modes of marketing for these hotels? Q.8. What is the ‘Tariff Plans’ for these hotels? Q.9 Do you consider the chain hotels as a threat for your business? If yes, please elaborate. Q.10. Is the researcher allowed revealing your identity, to address you in his research? Appendix: 3 Cover letter Dear participant/respondent, I am an undergraduate student at Coventry University London campus, pursuing a BA (Hons) Top up International Hospitality and tourism management. As part of my course work and degree requirements. I am undertaking a research on comparative study between the marketing concepts of hotel chains and family operated hotels in India. Therefore, I am conducting interviews to get a better knowledge about my research. You are cordially invited to take part in the interview sessions being a Indian resident and over the age of 18 atleast. This interview will take only few minutes. This e-mail interview is for an educational purpose only; the researcher will not use this information for any personal motives or financial gains. The names of the interviewees will be kept confidential on their request. Thank you for your time, Warm regards Dikshit Jhanb Read More